Bitwise Asset Management has withdrawn its application with the Securities and Exchange Commission (SEC) for its proposed bitcoin exchange-traded fund (ETF).

The San Francisco firm requested the withdrawal in a filing posted with the SEC on Tuesday, while NYSE Arca – the ETF's sponsor – has also withdrawn the associated 19b-4 filing for the fund.

While the news may disappoint those in the investment community keen to see the first ever bitcoin ETF in the U.S., the news is not surprising. The proposal was rejected by the SEC in October, although the regulator said soon after that it was reviewing the rejection.

The proposal did not meet legal requirements to prevent market manipulation or other illicit activities, the commission said in its rejection announcement.

"This is the next step towards our long-term goal of bringing a bitcoin ETF to market, and we plan to refile our application at an appropriate time. We are currently working hard on answering the questions that the SEC raised in its 112-page response to our initial filing," according to Matthew Hougan, Bitwise's global head of research.

"We remain fully committed to the development of a bitcoin [exchange-traded product], and will update you when we have more details on our timeline," he said.

With the action, Bitwise leaves just one bitcoin ETF proposal before the SEC.

The bitcoin and U.S. Treasury bond ETF planned by Wilshire Phoenix is still under review and is expected to be ruled on by the SEC by Feb. 26. The firm has previously told CoinDesk its ETF has been built with mechanisms to address the SEC's concerns over ETFs based on digital assets, and hopes it will see approval.

The SEC has so far rejected at least a dozen bitcoin ETFs.

Edit (11:55 UTC, Jan. 15 2020):This article was updated with comment and additional information from Bitwise.